This is class 3 in the MOOC specialization, Become a Sustainable Business Change Agent.
This class looks at the big issues companies are fixing - climate change, water, worker satisfaction and supply chain issues.
You will learn tools to help your company address these issues intelligently.
The class ends with an assignment to set a science-based carbon reduction target for a small company. Tis is absolutely cutting edge material. Only about 300 companies in the whole world are doing this as of July 2017. You could put your company in the elite group!
With the knowledge and tools you have acquired from the 3 classes in this specialization you are well on your way to making a difference in your company, and making the future brighter for everyone.
Thank you for being part of this program!

Taught By

John Byrd

Senior Instructor

Kenneth Bettenhausen

Professor

Transcript

Hi. This week we look at climate change in business in some depth. Climate change is a tough problem. The most serious impacts won't be felt for decades. There's uncertainty about exactly what the impacts are going to be. Addressing climate change requires doing something today, and it can be expensive. And finally, the problem is huge, so individual actions will have negligible effect. Only with cooperative action can the problem really be mitigated. This means there's strong incentives for people to delay or freeride on the efforts of others. Like I said, it's a tough, tough problem. But just because it's difficult, doesn't mean we shouldn't do something. In the United States, the impact of climate change 20, or 30, or 40 years from now will probably be damage to coastal property and infrastructure from rising sea levels, and increased storm surges. Climate driven changes in agricultural or production and energy demand, and the impact of higher temperatures on labor productivity and public health, including the spread of some tropical diseases. This is from a report by Risky Business, a group formed by Michael Bloomberg, Henry or Hank Paulson, and Tom Steyer. These are very conservative business people. In the US, there's going to be some impact. But the real serious impacts, the life threatening impacts, will be in developing countries, especially those within 20 degrees or 25 degrees of the Equator. As we discussed in a previous lecture about population and whatnot, developing countries will see all of the population growth over the next 50 years. They're having a hard time supporting their current populations. Because of climate change food production and water stress are going to become bigger challenges than they already are. Tropical countries that depend on rain-fed agriculture will suffer the most. These countries will suffer from more extreme droughts, higher temperatures, and the spread of some diseases, such as dengue fever and malaria. Coastal areas will be exposed to more extreme weather events, and warming oceans could reduce fish populations as coral reefs bleach and die. Keep in mind that these countries would be under enormous stress just from population growth, so the effects of climate change add to that stress. The question you might ask, but not feel comfortable asking is, why should we be concerned about climate change if the effects on the US won't be too large? There are a couple of answers to this question. First, while the impact of climate change in the US might not be as severe as in other places, it will have an effect, and that effect will largely be negative. Second, the global economy will be affected, which means our companies, and therefore our workers and our families, will suffer. Third, if climate change occurs as predicted, and little or no action is taken, the loss of life and the suffering could be terrible. As human beings, we have some obligation to try and avoid such a humanitarian catastrophe. Fourth, many, many companies are already working on climate issues. At a minimum, they're computing their carbon emissions. This isn't just altruism. Without knowing where they are using the most fuel and emitting the most emissions, they can't find savings and efficiencies. It's part of doing business these days. Now, I'm not going to talk about the science of climate change or the greenhouse effect. You can find that information on the internet, and I'll post a couple of basic readings. Instead, what I want to do is give you the information necessary to understand current climate policy, and then show how business can fit into or accommodate that policy. We'll do this in a fairly simple way. I'm going to talk about four numbers. These numbers are all concentrations of atmospheric carbon dioxide in parts per million, in ppm. The first number I want to talk about is 350 parts per million. The atmospheric concentration of carbon dioxide during the pre-industrial period, stretching back, possibly, 15,000 years from today, was between 275 and 290 parts per million. The argument about 350 parts per million, as a carbon or climate target, goes like this. Much of modern civilization is based on the climate associated with the 275 to 290 part per million atmospheric carbon regime. On the human side, agricultural and transportation systems, the location of cities, the enormous amounts of infrastructure, were all designed and built with this climate regime in mind. Straying too far from the climate patterns we're used to, puts us in uncharted territory. It puts these investments, the knowledge accumulated over centuries, and the human lives organized around this climate pattern at risk. Beyond humans, other species have evolved and found niches that would be threatened by a significant change in climate patterns. Therefore, to have a planet like the one civilization developed on, we need to keep carbon concentrations below about 350 parts per million. That seems to be the upper bound that will produce a climate similar to the pre-industrial climate, at 350 parts per million. There's still a lot of variability in weather, droughts, and heat waves, heavy rains, that sort of thing. But largely, we can tolerate or deal with this level of variability. I think we can summarize the 350 parts per million position as this. This is the climate that we grew up with, that we're comfortable with, and that we know about. So, this should be our ultimate target. More recently, 350 has become a climate organization, 350.org, arguing for investors to divest from fossil fuel companies. A number of climate scientists - the most prominent is probably James Hansen who was the head of climate studies at NASA- argue that we need to get back to that 350 parts per million level of carbon in the atmosphere. The next number I want to talk about is 450 parts per million of atmospheric carbon. The best predictions we have say that at 450 parts per million of atmospheric carbon, global temperatures will increase between about 1.5 degrees and 3 degrees centigrade. Now, for us Fahrenheit users, that's about 2.7 degrees to 4.1 degrees Fahrenheit. Another way to look at 450 parts per million is that it's associated with a 50% chance of an average temperature increase of less than 2 degrees C, and a 50% chance of more than 2 degrees centigrade. It's important to understand that this is not a uniform increase in global temperature. The best science currently available predicts more extreme weather events, a rise in sea levels, and mixed events on agriculture with this warming. The effects of an increase will vary regionally. The interiors of continents are likely be hotter and drier, especially those close to the Equator. Coastal areas will be wetter and subject to more extreme weather formotions. With 20 or 30 years to adjust, it seems possible to stabilize atmospheric CO2 at this level. At 450 parts per million, it would require adjustments in energy systems and investments in adaptation. The adaptation required is to address changes in crop yield, sea level rise, and so on. This target, 2 degrees centigrade, seems to be a compromise between danger to the planet and what might be politically and economically feasible, in terms of investments to address climate change. The 450 parts per million target also is a guess about when climate tipping points might be triggered. Tipping points are big changes that can't be reversed or very, very hard to reverse, so put us onto a whole new world. For example, at some temperature increase, the melting of the Greenland ice sheet may become irreversible. That means that, eventually, we'll have a sea level rise of 6 meters/20 feet. It doesn't happen all of a sudden, but once that tipping point is reached, we know that it will happen. Now, there isn't any evidence that 450 parts per million will avoid the big climate tipping points, but people seem to think that 450 parts per million is some sort of upper bound that we shouldn't cross. At one time, 550 parts per million was thought to be a reasonable target to avoid catastrophic impact. In fact, in a very influential report, the Stern report published in the United Kingdom, 550 parts per million was set as the upper bound. The 550 parts per million target associated with about a 3 degree centigrade average temperature increase, within a bandwidth that ranges from 2 degrees to about 4.5 degrees centigrade. So, it's way beyond the 2 degrees centigrade target that most people think is appropriate now. So, that's the third number, 550 parts per million. The final number I want to talk about is 400 parts per million. Actually, as of today, the number is 403.64. That's the atmospheric CO2 concentration measured at Mauna Loa Observatory, and is the gold standard for actual measurements. You can check more recent concentrations at the CO2 Now website. Now, there's some seasonal fluctuation with concentrations, peaking in April and May. Over the winter, CO2 increases but, in May and June, plants in the northern hemisphere start growing and absorbing carbon dioxide, particularly the huge forests of Siberia. No, what this number 400, or 403.64, tells us, is that getting to 350 parts per million will be very hard, and staying below 450 parts per million will be a challenge. Here's the data for May. The maximum CO2 measurement at Mauna Loa for the past eight years. The maximum increase is about 2.5 parts per million per year. At this rate, we have 15 or 20 years, maximum, to reduce emissions to stay under the 450 parts per million target. So, I've given you four numbers: 350, the safe zone; 400, where we are now; 450, the current compromise target; 550, where things could go off the rails. So, this is a short introduction to climate. Thanks.

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